According to Jon Peddie Research (JPR), shipments of discrete graphics cards were down in the first quarter of the year. This is in line with seasonal trends, as the market cools down after the holiday season.

The sequential drop was 6.7 percent, which was still better than the overall desktop PC market, which slumped 9 percent. However, on a year-to-year basis add-in-board (AIB) shipments were down 0.8 percent. PC sales were down 1.1 percent.

Nvidia still controls two thirds of the market

Total AIB shipments in Q1 were just 14 million units. AMD and Nvidia both saw their shipments decrease 6.6 percent, so their market share did not change much.

Nvidia controls an estimated 65 percent of the market, up from 64.2 percent last year. AMD’s market share in Q1 was 35 percent, down from 35.6 percent a year ago.

The overall volume remains weak and in the long run things could get even worse, as on-die integrated graphics have already taken a big toll on sales of entry level discrete cards. As integrated GPUs become even faster, they are likely to cannibalize the low end market even further.

JPR points out that the AIB market peaked in 1999, with 114 million units shipped. Last year saw only 65 million units and the stagnant trend is likely to continue this year.

It’s not all bad news for AIBs

Although the slump in discrete GPU shipments is hurting AMD and NV hardware partners, JPR offers a rather encouraging outlook.

It points out that graphics cards are one of the most powerful, essential and exciting components in the PC market today. PC gaming is hardly dead, in fact it is going through what can only be described as a small renaissance. PCs will offer 4K/UHD gaming years ahead of consoles and the Steam Machine concept is looking good, too.

The compute market is another driver, as JPR points out:

“The technology is entering into major new markets like supercomputers, remote workstations, and simulators almost on a daily basis. It would be little exaggeration to say that the AIB resembles the 800-pound gorilla in the room.”The AIB market is quite a bit less colourful and eventful than it was back in the day, but at least AIBs still have a lot on their hands and they are trying to tap new markets.

It is already quite obvious that all Radeon R9 290X graphics cards at launch will be based on AMD's reference design as partners did not get either the green light from AMD or the final design in order to make their own custom designs. According to a few sources that we had a chance to talk to, custom R9 290 series graphics cards could come in late November.

Some of our sources did mention that it will be a race, as all partners will start making custom graphics cards at the same time. Of course, the big ones like Sapphire, Asus, MSI, Gigabyte and others will probably be a tad bit faster than small AMD AIB partners and come up with their own solution a bit earlier.

According to a few details that we managed to gather, most are aiming at mid- to end of November but in the end it is important to have those graphics cards on retail/e-tail shelves in time for the Christmas shopping spree.

It is becoming increasingly obvious that the discrete graphics market is shrinking and companies who traditionally made their living from graphics cards sales have to rethink their future.

Many of them went after power supply units, chassis or similar PC related products and in select markets some of them tried to peddle tablets. Our sources admitted that this is a tough market to compete in, but there is some confidence that Nvidia might support some of them in an effort to push more affordable Tegra 4 tablets to the market.

Some big names in the graphics already have plans to roll out phones in China, with expansion to the Russia and Eastern European markets at a later date, as they know manufacturing and can believe they can offer a good price.

For example, Nvidia currently sells more notebook GPUs than desktop parts and the big hype about Tegra is simply the result of market trends, as the market goes mobile. AMD partners have got a nice boost of sales thanks to Never Settle Reloaded promotions, but the hope of a real next generation Radeon later this year should really help their cause.

According to info over at Techpowerup.com, some AMD AIB partners will decide to skip the Tahiti LE GPU scheduled to appear on November 27th.

As rumored earlier, Tahiti LE will not get the, so called, AMD reference design card, thus leaving AMD partners to design their own graphics cards and reuse the existing PCBs from the HD 7900 or 7800 series. Club3D already showed its HD 7870 joker card that is scheduled to appear on November 27th and has pretty much the same specs expected to be seen on graphics cards with the Tahiti LE GPU.

In case you missed it, the Tahiti LE will feature 1536 stream processors and work at 925MHz base and 975MHz Boost GPU clocks while 2GB of GDDR5 memory will be set to work at an impressive 6000MHz, at least on the Club3D limited edition graphics card. Despite earlier rumors that Tahiti LE will be a part of HD 7800 series, rather than the HD 7900 series and that partners might name the card as the HD 7890, Club3D decided to make it a part of its limited edition HD 7870 series graphics card and simply call it the HD 7870 jokerCard.

Since most, if not all, AMD based Club3D cards comes from TuL, the same company behind Powercolor and VTX3D, it is quite possible that these will do a similar graphics card.

According to the details over at Techpowerup.com some major partners will rather decide to skip this GPU. Some of our sources, including one of the major AIB partners, confirmed that there are no plans for such graphics card, at least not in the near future.